Correlation Between United Bankshares and Valley National
Can any of the company-specific risk be diversified away by investing in both United Bankshares and Valley National at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United Bankshares and Valley National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bankshares and Valley National Bancorp, you can compare the effects of market volatilities on United Bankshares and Valley National and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in United Bankshares with a short position of Valley National. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bankshares and Valley National.
Diversification Opportunities for United Bankshares and Valley National
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Valley is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding United Bankshares and Valley National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valley National Bancorp and United Bankshares is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on United Bankshares are associated (or correlated) with Valley National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valley National Bancorp has no effect on the direction of United Bankshares i.e., United Bankshares and Valley National go up and down completely randomly.
Pair Corralation between United Bankshares and Valley National
Given the investment horizon of 90 days United Bankshares is expected to generate 1.52 times less return on investment than Valley National. But when comparing it to its historical volatility, United Bankshares is 1.23 times less risky than Valley National. It trades about 0.12 of its potential returns per unit of risk. Valley National Bancorp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 665.00 in Valley National Bancorp on September 14, 2024 and sell it today you would earn a total of 348.00 from holding Valley National Bancorp or generate 52.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
United Bankshares vs. Valley National Bancorp
Performance |
Timeline |
United Bankshares |
Valley National Bancorp |
United Bankshares and Valley National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Bankshares and Valley National
The main advantage of trading using opposite United Bankshares and Valley National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bankshares position performs unexpectedly, Valley National can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Valley National will offset losses from the drop in Valley National's long position.United Bankshares vs. Comerica | United Bankshares vs. Fifth Third Bancorp | United Bankshares vs. Zions Bancorporation | United Bankshares vs. PNC Financial Services |
Valley National vs. Fulton Financial | Valley National vs. Webster Financial | Valley National vs. United Bankshares | Valley National vs. FNB Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |